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Case Number

AFAD No. 1224 of 1953

Advocates

Atul Chandra
Gupta
Purusottam Chatterjee and Rameswar Saha
E.R. Meyer and Amiya Kumar Mukherje

Judges

S.R Das Gupta
Guha, JJ.

Acts

section 115 of the Code of Civil Procedure.11.
SECTION 116 TRANSFER OF PROPERTY ACT
Act being West Bengal Act V of 1948.
Act, being Bengal Act I of 1947,
Rent Act of 1948].7.
Rent Act of 1948,

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Smart Summary

Case Summary — Opinion of S.R. Das Gupta, J.

Factual and Procedural Background

This is an appeal from a decision of the Judges, Special Bench of the Court of Small Causes, Calcutta dated 10 July 1953, which reversed the decision of the Sixth Judge of that Court in Suit No. 2625 of 1951 dated 20 December 1952. The plaintiffs in the original suit are the appellants before this Court.

The plaintiffs had sued for ejectment of the defendant from premises No. 5, Raja Raj Kissen Street, Calcutta. There was originally a 10-year lease which expired in June 1947. Prior to that expiry the Rent Ordinance (coming into force 1 October 1946) had been continued by Bengal Act I of 1947 and later by West Bengal Act V of 1948 (the opinion also notes an Act of 1 December 1948). The suit was filed on 8 December 1951 on the stated ground that the plaintiffs required the premises for their own purposes.

Before instituting the suit, the plaintiffs served a notice to quit (served 23 Aswin, 1357 B.S., expiring at the end of Chaitra, 1357 B.S.). The trial Court dismissed the plaintiffs' suit on the ground that this notice was insufficient, although it found that the plaintiffs needed the premises. The trial Court reasoned that after the lease expired the defendant was a yearly tenant (year running from 1 Ashar to end of Jaistha) and therefore the notice expiring at the end of Chaitra was invalid. The lower appellate Court (Special Bench) reversed the trial Judge and dismissed the suit. The present appeal challenges that appellate decision.

Legal Issues Presented

Whether a notice to quit was necessary before ejectment where the defendant remained in possession by operation of the Rent Ordinance / Rent Acts (i.e., whether the tenant holding by statute could be ejected without a notice).
Whether the landlord's acceptance of rent, assent to the tenant remaining in possession, use of the word "tenant" in a notice and pleadings, or other circumstances could give rise to an implied contractual tenancy (year-to-year) such that Section 116 of the Transfer of Property Act would apply and require a notice to expire with the tenancy year.
Whether proceedings taken under the Rent Act for fixation of rent would prevent the landlord from obtaining a decree for ejectment if the statutory condition preventing ejectment ceased to be operative.

Arguments of the Parties

Appellant's Arguments (Mr. Gupta)

A notice to quit was unnecessary; the tenant could be ejected even if no notice had been given because the tenancy had expired by efflux of time in June 1947 and subsequent possession was by virtue of statute (the Rent Ordinance / Rent Acts), not by contract.
The statutory regime permitted the tenant to remain on certain conditions (e.g., payment of rent allowable under the Rent Act); if any of those statutory conditions ceased to operate the tenant could be ejected.
Acceptance of rent by the landlords after the expiry of the tenancy did not alter the legal position or create a new contractual tenancy; mere receipt of rent would not create a tenancy entitling the tenant to a notice to quit.
Proceedings under the Rent Act (e.g., applications to fix rent) were taken under statutory provisions and would not debar the landlords from seeking ejectment if the statutory conditions preventing ejectment ceased to apply.
Relied on Indian and English authorities: Haralal Das v. Pashupati Charan Biswas; Kai Khushroo Benzonjee Capadia v. Bai Jerbai Hirjibhoy Warden; and the English cases Morrison v. Jacobs and Davis v. Bristow / Penrhos College v. Butler to support the proposition that acceptance of rent does not create a tenancy in such circumstances.

Respondent's Arguments (Mr. Meyer)

Did not dispute that mere acceptance of rent alone would not necessarily create a tenancy; however, contended that Section 116 of the Transfer of Property Act applied and, taken together with other circumstances, would make an implied tenancy from year to year (relevant because the original purpose of tenancy was a manufacturing purpose).
Maintained that, beyond receipt of rent, other circumstances permitted inference of an implied tenancy: (a) the landlords' assenting to the tenant's continuance in possession, (b) acceptance of rent, (c) the giving of a notice to quit and the contents of that notice, and (d) averments in the plaint describing the defendant as a "tenant".
Argued that, taking these circumstances together, a contract of tenancy could be implied even absent an express agreement.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Haralal Das v. Pashupati Charan Biswas, 58 C.W.N 696	Cited as authority for the proposition that acceptance of rent does not necessarily create a tenancy when possession continues by operation of statute.	The Court noted the appellant relied on this decision to support the proposition; the Court accepted the general proposition (that acceptance of rent would not of itself create a tenancy in such statutory circumstances) as part of its reasoning.
Kai Khushroo Benzonjee Capadia v. Bai Jerbai Hirjibhoy Warden, 11 F.C.R. 262 (at 272)	Cited for similar principles as Haralal Das — that acceptance of rent under statutory regimes does not necessarily create a new tenancy.	The Court observed the appellant relied on observations in that case; the Court treated the principle as consistent with its conclusion that acceptance/assent under the Rent Act did not create a tenancy.
Morrison v. Jacobs, (1945) 1 K.B. 577	English authority stating that when a tenant remains in possession because statute deprives the landlord of his power to evict, acceptance of rent by the landlord does not justify inferring a new contractual demise; by contrast, a tenancy may be implied where the landlord voluntarily abstains from turning the tenant out.	The Court expressly relied on Mackinnon L.J.'s observations in this case to support its core holding that where possession continues by force of statute (and the landlord has no real choice), Section 116 of the Transfer of Property Act does not apply and acceptance/assent will not create a tenancy.
Davis v. Bristow; Penrhos College, Limited v. Butler, (1920) 3 K.B. 428	English authorities underlying the two Indian decisions relied on by the appellant, cited in support of the proposition that acceptance of rent does not in such cases create a tenancy.	The Court noted these English cases were the basis for the earlier Indian decisions cited by the appellant; they formed part of the chain of authority supporting the acceptance-of-rent principle, which the Court accepted for its reasoning.

Court's Reasoning and Analysis

The Court proceeded by examining whether the facts and circumstances admitted in the record could give rise to an implied contractual tenancy such that Section 116 of the Transfer of Property Act would operate and require a notice to quit conforming to a yearly tenancy.

The Court accepted the concession that mere acceptance of rent alone is not necessarily sufficient to create a tenancy. It then analyzed the additional factual circumstances relied upon by the respondent (assent to continued possession, accepting rent, the notice to quit and its contents, and averments in the plaint).

The Court's key legal point was that Section 116 of the Transfer of Property Act applies only where the landlord has a genuine option to allow or refuse the tenant's continued occupation (and to accept or refuse rent). Where, however, the tenant remains in possession solely because statutory restrictions (the Rent Ordinance / Rent Acts) deprive the landlord of the former power of eviction and compel the landlord to accept the statutory regime, the landlord has no meaningful choice. In such circumstances, the landlord's acceptance of rent or apparent assent to continued occupation cannot be treated as voluntary conduct from which an implied tenancy should be inferred.

The Court relied on Mackinnon L.J.'s observations in Morrison v. Jacobs to illustrate this point: at common law a new tenancy may be inferred where the landlord voluntarily refrains from turning the tenant out and accepts rent, but where possession continues by force of statute (i.e., the landlord cannot lawfully evict), no such inference is proper.

Applying that principle to the present record, the Court found little or no evidence that the landlords voluntarily assented to the tenant's continued possession beyond the mere fact that the tenant remained in occupation. The notice to quit may have been given out of caution or ignorance of the law; its mere existence did not prove assent. The use of the word "tenant" in the notice and in the plaint was not significant because the Rent Act itself defines a person occupying after expiry of a lease as a "tenant" (section 2(11) of the Rent Act of 1948), so the terminology did not show that the parties had created a contractual tenancy by consent after expiry of the lease.

Consequently, the Court concluded that there were no sufficient circumstances from which to imply a contractual tenancy and that Section 116 of the Transfer of Property Act did not apply. The appellant's principal contention — that no notice was necessary because the defendant's possession was statutory and not contractual — was sustained to the extent that the notice could not be treated as necessary to bar ejectment.

Holding and Implications

Holding: The appeal is allowed. The judgment and decree of the lower appellate Court (Special Bench) are set aside and the judgment and decree of the trial Court are restored and affirmed.

Direct consequences and orders given in the opinion:

The appellants (landlords) are entitled to their costs of this appeal.
No order was necessary on the application under Section 115 of the Code of Civil Procedure.
The respondent (defendant) was granted three months from the date of the judgment to vacate the premises and the decree is not to be executed for three months from date.

The opinion does not purport to lay down any broader novel precedent beyond applying existing authorities (notably Morrison v. Jacobs) to the statutory context; its practical effect is to confirm that where possession continues by operation of the Rent Acts and the landlord lacks a true choice, acceptance of rent or passive allowance of occupation does not create an implied tenancy under Section 116 of the Transfer of Property Act.

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Kartick Chandra Das v. Gangadutt Murarka

S.R Das Gupta, J.:— This is an appeal from a decision of the Judges, Special Bench of the Court of Small Causes, Calcutta, dated the 10th July, 1953, reversing the decision of the Sixth Judge of the Court of Small Causes, Calcutta, in Suit No. 2625 of 1951, dated the 20th December, 1952. The plaintiffs in the said suit are the appellants before us.

2. The matter arises in this way: The plaintiffs had instituted the said suit for ejectment of the defendant from premises No. 5, Raja Raj Kissen Street, Calcutta. Originally, there was a lease for ten years granted by the plaintiffs in favour of the defendant in respect of the said premises. The said lease expired in June, 1947. Before that date the Rent Ordinance had, on the 1st of October, 1946, come into existence. It was continued by subsequent Act, being Bengal Act I of 1947, and thereafter it was continued by another Act being West Bengal Act V of 1948. On the 1st of December, 1948, the Act of 1948 was passed. This suit was filed on the 8th December, 1951, on the ground that the plaintiffs required the premises for their own purposes. Prior to the institution of the suit a notice to quit was served on the defendant expiring by the end of Chaitra, 1357 B.S That notice was given on the 23rd Aswin, 1357 B.S The lower Court dismissed the suit on the ground that the notice was insufficient. It, however, found that the plaintiffs required the premises for their own use. The reason for holding that the notice was insufficient by the said Court was that after the expiration of the lease the defendant held the premises as a yearly tenant, the tenancy commencing from the 1st of Ashar and ending with the end of Jaistha each year and therefore the notice to quit in the present case having expired with the end of Chaitra, 1357, B.S, was held by the said Court to be invalid. The said Court held that the notice ought to have expired with the end of Jaistha, 1357, On this ground both the courts dismissed the plaintiffs' suit. The present appeal has been preferred against the said decision of the lower appellate Court. Mr. Gupta appearing on behalf of the appellants contended before us in the first place that a notice to quit in this case was wholly unnecessary and the defendant is liable to be ejected even if no notice had been given. In the premises, Mr. Gupta contended that the notice should have been ignored and a decree for ejectment should have been passed against the defendant. Mr. Gupta's argument was that the tenancy had expired with the efflux of time in June, 1947, and the tenant no doubt remained in possession but that was not because of any agreement between the parties but because of the force of the statute that is, the Rent Ordinance and the subsequent Acts. The statute according to Mr. Gupta allowed the tenant to remain in possession on certain conditions and if at any time any one of those conditions which prevented ejectment ceased to be operative, then the tenant would be liable to be ejected. The net result of Mr. Gupta's contention is that there was no tenancy created between the parties by virtue of any contract but the tenant was entitled to remain in possession of the premises by virtue of statute and on the conditions laid down therein. One of such conditions was that he would pay rent allowable by this Act and the Rent Act made provisions under which the rent allowable by this Act would be fixed. Applications were made in this case both by the landlords and tenant for fixation of such rent but those applications were made by virtue of the provisions of the Act and not because of any contract between the parties. Mr. Gupta further argued that rent was no doubt received in this case by the land-lords after the expiry of the tenancy in June, 1947, but mere receipt of rent would not alter the legal position of the parties and a tenancy would not be created because of receipt of such rent by the landlords. According to him the tenant is entitled to remain in possession by paying the rent allowable by the Act and the landlords in such circumstances have no other alternative but to accept the rent. In support of his said contention Mr. Gupta relied on the case of Haralal Das v. Pashupati Charan Biswas (1) reported in 58 C.W.N 696 and on the observations of Mr. Justice Mukherjea, as he then was, made in the case of Kai Khushroo Benzonjee Capadia v. Bai Jerbai Hirjibhoy Warden, (2) reported in 11 Federal Court Reports 262 at 272. The said two decisions were based upon two English cases, being Morrison v. Jacobs, (3) (1945) 1 K.B 577 and Davis v. Bristow, Penrhos College, Limited v. Butler (4) (1920) 3 K.B 428. Mr. Gupta contended on the authority of those decisions that acceptance of rent in such circumstances does not create a tenancy and does not entitle the tenant to have a notice to quit before he can be ejected. Mr. Gupta further contended that any proceedings which the landlord might have taken for the purpose of fixing the rent under the Rent Act would not also debar him from obtaining a decree for ejectment if anyone of the conditions, which prevented such ejectment under the Rent Act, had ceased to be operative.

3. Mr. Meyer appearing on behalf of the respondent did not dispute the proposition that mere acceptance of rent would not be sufficient to create a tenancy between the parties entitling the tenant to have a notice to quit before he could be ejected. Mr. Meyer's contention was that Section 116 of the Transfer of Property Act was applicable to this case and if section 116 applied then there was a tenancy between the parties and it would be a tenancy from year to year, as admittedly the purpose for which such tenancy was originally taken was a manufacturing purpose. In that event, Mr. Meyer contended, the notice to be served must expire with the year of the tenancy which would be the end of Jaistha of each year. As for the decisions cited by Mr. Gupta, Mr. Meyer contended before us that what was held in those cases and particularly in the case of Morrison v. Jacobs, (3) reported in [(1945) 1 K.B 577], was that mere acceptance of rent would not be enough to create a tenancy. But Mr. Meyer contended that there may be other circumstances from which a contract of tenancy may be implied. In this case, Mr. Meyer's contention was that, apart from the fact of acceptance of rent by the landlords there were other circumstances which go to show that a tenancy was created between the parties. I should mention that Mr. Meyer stated before us that it was not his client's case that there was an express agreement between the parties, but his case was one of implied agreement or in other words, that there were circumstances in this case from which a tenancy could be and should be implied. The circumstances on which Mr. Meyer relied for his present contention are as follows:

(a) assenting to the tenant's continuing in possession,

(b) accepting rent,

(d) the averments made in the plaint filed in this suit.

4. As for acceptance of rent it has been held, as I have already indicated, in a number of decisions including a decision of a Division Bench of this Court that in a case, where the tenant remains in possession by virtue of the Statute, acceptance of rent would not be sufficient to create a tenancy between the parties. As for the landlord's assenting to the tenant's continuance, I do not see why on principle there should be any difference between the two positions, namely, where the landlord accepts rent and where the landlord assents to the tenant continuing in possession. If in the first case no tenancy would be implied, I do not see why a tenancy would be implied in the second. In my view in a case, where the tenant is permitted by a statute to continue in possession, the landlord has no alternative but to accept rent and also to allow the tenant to continue in possession. The law permits the tenant to continue in possession on payment of rent allowable under the Act and the landlord has no say in this matter. If then the landlord accepts the rent and/or allows the tenant to continue in possession, it cannot be said that a tenancy has been created between the parties, so that the tenant would be entitled to a notice to quit before he could be ejected. In my opinion, Section 116 of the Transfer of Property Act has no application to a case where the landlord has no alternative but to allow the tenant to remain in possession and to accept the rent payable by the tenant. Section 116 of the Transfer of Property Act would be applicable to a case where the landlord has the option either to allow or not to allow the tenant to remain in possession and/or either to accept or not to accept the rent payable by the tenant. Where the landlord has no such choice, there is no scope for application of Section 116 of the Transfer of Property Act. The view which I am taking in this matter is supported by the observations of Mackinnon, L.J, in the said case of Morrison v. Jacobs, (3) [(1945) 1 K.B 577]. His Lordship observed as follows:

“At common law, if at the expiration of a tenancy a landlord has acquired a right to claim possession against his tenancy and instead of exercising that right he allows him to remain in the house and accepts rent from him as before, the parties by their conduct may, with reason, be held to have entered into a new contract of demise. But the essential factor in those circumstances is that the landlord voluntarily abstains from turning the tenant out. When the tenant remains in possession, not by reason of any such abstention by the landlord, but because the Rent and Mortgage Interest Restrictions Acts deprive the landlord of his former power of eviction no such inference can properly be drawn”.

5. In my opinion, therefore, the fact that the landlords assented to the tenant's continuing in possession and accepted rent from him did not make any difference in the position of the parties and did not create a tenancy between them.

6. I ought to mention that the only evidence adduced in this case to show that the landlord assented to the tenant's continuing in possession was the fact that the tenant continued in possession. There is practically no other evidence. Mr. Meyer, for the purpose of showing that the landlord assented to the tenant continuing in possession relied upon the fact that the landlord had given notice of ejectment to the tenant. I am unable to accept Mr. Meyer's contention. The notice to quit, which the learned Advocate for the appellants contends before us was wholly unnecessary and could be ignored, might have been given for greater safety or in ignorance of the position in law, namely, that no notice was necessary. I cannot hold merely from the fact that a notice had been given that there was evidence of the fact that the landlord assented to the tenant's continuing in possession. Mr. Meyer also relied upon the fact that in the said notice it was stated that the defendant was holding as a monthly tenant and the plaintiffs were his landlords. It should be noted that under the Rent Act a person occupying the premises even after the expiry of the period of the tenancy is a “tenant” [section 2(11) of the Rent Act of 1948].

7. That being so, no special importance would be attached to the use of the word “tenant”. If he is still a tenant under the Rent Act of 1948, the plaintiffs' pleader giving notice would be justified in using the term “tenant” and it must not he held that he used the word “tenant” in the sense in which Mr. Meyer wants us to understand it. I have, therefore, come to the conclusion that there is little or no evidence of the fact that the landlord assented to the tenant's continuing in possession. Before leaving this point, I should mention that Mr. Meyer relied upon the averments made in paragraphs 3 and 4 of the plaint where the plaintiffs have described the defendant as a “tenant”. The same observations which I have made with regard to the use of the word “tenant” in the notice to quit are, in my opinion, applicable to the said statement made in the plaint. It should be noted that the plaintiffs have nowhere said that after the expiry of the period of the lease the plaintiffs assented to the said defendant's continuing possession. All the contentions of Mr. Meyer, therefore, fail.

8. In the result, the appeal is allowed. The judgment and decree of the lower appellate Court are set aside and those of the trial Court are restored and affirmed.

9. The appellants are entitled to their costs of this appeal.

10. No order is necessary on the application under section 115 of the Code of Civil Procedure.

11. Mr. Meyer appearing on behalf of the respondent prayed for some time to vacate the premises. Three months' time from this date is granted to the respondent to vacate the premises and the decree is not to be executed for three months from date.

Guha, J.:— I agree.

S.K.B

Kartick Chandra Das v. Gangadutt Murarka

Case Summary — Opinion of S.R. Das Gupta, J.

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments (Mr. Gupta)

Respondent's Arguments (Mr. Meyer)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Kartick Chandra Das v. Gangadutt Murarka

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